The Future is Here, and It Pays in Euros
By, Mike Mandlin

What’s Going On

Basketball globalism is the new black and, for the most part, I'm quite pleased with that.  There's much more talent in the NBA than there was fifteen years ago, and the rise of international basketball has played a big role in that.  Who would have imagined that a soft, teenage German would turn into a 7-foot Mitch Richmond?  Or that a miniature Frenchman would dominate the paint and beat out the greatest player of this generation (a Virgin Islander) for Finals MVP?  Fifteen years ago, who could have predicted that the NBA would feature a dominant 7'6" center who’s unstoppable in the post, comfortable from 20’, shoots almost 90% from the line, and speaks Chinese?  And these are just some of the top foreigners in Texas.

This summer, however, things changed a bit, and the NBA became the exporter.  Seeing twelve players sign with international teams, my frustration with the league's stupid salary cap, trade restrictions, and anti-competitive economic policies, turned to real concern that foreign competition for players will significantly dilute the level of talent in the NBA in the coming years.  It isn't the marketplace competition, in itself, that troubles me; competition is the scalpel that trims the fat from an industry.  Rather, I'm concerned that the NBA is too fat and too dysfunctional to respond effectively to this competition and that in the coming years, American and foreign players I want to see in person will end up making Euros overseas. 

 Among the NBA ex-pats, only Josh Childress is of unquestionable starter-quality. Nenad Kristic was an up-and-comer before hurting his knee, but only 25-years old, he should return to form.  Juan Carlos Navarro was a Euroleague veteran who, like most international vets, had an up and down rookie season, adjusting to the NBA, but certainly showed the talent to be a major contributor.  The rest of the players were bottom-of-the-rotation quality, but losing them is just the start of things to come. 

Childress signing with Olympiacos got lots of press, and rightly so (as I've previously noted) but the Earl Boykins signing might be more illustrative of this new expatriate trend. Boykins was probably the fastest player in the NBA in his salad days, but at 32, he's lost a half-step.  When you're 5'5", you can't lose a half-step and remain an effective rotation player in the NBA, so this summer finding diminished interest in the US, Boykins' took a one-year offer from Virtus Bologna.  For decades, Europe has been the respite for NBA players who couldn't cut it anymore, but still want to play and earn some dough.  But Boykins isn't departing for chump change; his $3.5 million contract makes him the most highly paid player in Italy, and it's significantly more than he could get in the NBA, unless someone were to bring Billy King out of exile.  The signing is an experiment for both parties and something of an audition for players with Boykins' particular talents.

Most international guards who have played in the NBA are a step slow on defense, but watching Olympic basketball, I was surprised to find a dearth of excellent ball-handlers in the international game.  The US's opponents typically only had one or maybe two players who could bring the ball up against pressure defense.  It's one thing to have difficulty scoring on Kobe Bryant, but there isn't a single point guard in the NBA who would have trouble getting the ball across half court, against him.  Even solid teams like Germany struggled to handle the ball against tight single coverage. The international teams also lacked penetrators and slashers.  I initially thought the NBA players were just too quick, but even in games in which the US didn't play, there were very few players who could get in the lane to create high percentage scoring opportunities.  As it happens, that’s Boykins' bread and butter.

 It's amusing to think of a dwarf point-guard who doesn't pass (if he can possibly avoid it) as a prototype, but despite his limitations, Boykins' game is well suited for international play.  A superior ball-handler and able penetrator, Boykins finishes effectively in the lane with a variety of teardrops, and though he has lost that half-step, he'll still be faster than almost anyone he faces in the Euroleague.  Also, Boykins had never been particularly dangerous from NBA three-point range, but the Euroleague uses the much shorter WNBA three-point line, from which Boykins will be a threat.  Furthermore, despite his itsy bitsyness, Boykins is surprisingly strong—those little arms press over 300 lbs.  His strength certainly wasn't enough to offset his size disadvantage on the defensive end in the NBA, and will still be an issue to some degree in the Euroleague.  However, as Henry Abbott noted, international guards tend to be considerably slighter than NBA guards, so Boykins might not find holding his own ground quite as difficult, and he shouldn’t have problems with the more physical nature of international play, on the offensive end.  I expect Boykins to be very successful in Italy.

 Virtus isn't the only international team that looked to the NBA bench this summer to find a point guard with Boykins' game.  Jannero Pargo and Carlos Arroyo (not to mention Navarro) are scoring point-guards who can get in the lane and shoot very efficiently from a step or two inside the NBA three-point line; they should thrive overseas.  The success of these investments will encourage Euroleague teams to invest further and more aggressively in NBA players.  It’s ironic, for years the NBA has cherry-picked the best international players, like Toni Kukoc and Drazen Petrovic, and top prospects like Vlade Divac and Dirk Nowitski.  Now, foreign teams are starting to lop off the bottom end of NBA rosters.  And as those leagues grow and prosper, they'll look further up the ladder.

How We Got Here 

NBA teams suffer from a void of competent management (of which I have written so frequently) but the league also faces structural impediments; their Collective Bargaining Agreement codifies some of the league's most constrictive policies.  The ill-designed CBA was drafted hastily during the '98-'99 lockout and ratified in the final hours before the NBA-imposed deadline for negotiations.  Owners had publicly expressed concerns of out-of-control free-agency since Glenn Robinson demanded a $100 million contract, straight out of college—though he 'settled' for $68 million—and felt their fears justified when Kevin Garnett signed a 6-year $126 million contract with the Minnesota Timberwolves, in October of '97.  There was no way to prevent foolish owners from signing players to outrageous contracts without colluding, so the owners demanded (and got) a salary cap to control (themselves and) the salary boom, and to maintain a level playing field for small market teams.  Maintaining the Larry Bird exception gave teams seeking to retain their own free agents a big advantage, and trade restrictions to prevent the most moneyed owners from making New York Yankees-style moves—$15 million stars acquired for a good prospect or two—further curtailed player movement.  One reason for some of these rules was to keep stars from leaving the teams that drafted them, not for competitive reasons, but because Stern had long felt that being able to identify star players with a particular franchise was key to marketing the league.  He got his wish, and the NBA suffered from league-wide stagnation.

The trickiest element of CBA design in the NBA system is matching guaranteed contracts with a salary cap.  The NFL has a salary cap, but player contracts are largely not guaranteed.  That way, any player that doesn’t fit in the plan can be cut.  In baseball, contracts are guaranteed, but owners aren’t constricted by a salary cap so their personnel mistakes hit their wallets, but don’t prevent them from improving their teams.  The NBA tries to have to merge these two systems and it’s been a huge flop. 

Wasn't it amazing watching Olympian LeBron James, this summer, zip passes to players who could actually catch the ball and finish?  (And oh man, did they finish.)

Instead of watching James play with solid cast and compete for a championship every year, we've watched the best new player to come into the NBA since Tim Duncan run with the dregs of the league—because Cleveland lucked out in the draft lottery, and then made a few bad personnel decisions.  They finally made a good move, firing their incompetent GM, Jim Paxson in 2005, and after a few mistakes to start, replacement Danny Ferry settled into the role.  With Ferry, the team’s decision-making has improved significantly, but the mistakes have, have virtually paralyzed them—until fear of losing James in free agency spurred some recent creativity.  As well as make it difficult for bad teams to get back on their feet, the CBA impedes good teams trying to be great teams.  How many times have you heard about a team being "one player away" but cap-strapped?  The CBA was instituted to keep things from getting out of hand and instead they've prevented teams (and the game) from evolving.

Another strange clause in the CBA prevents NBA teams from offering more than $500,000 to buy out the contracts of foreign league players, who wish to sign with an NBA team.  Perhaps this rule was written to prevent the kind of blind bid auctions you see in Major League Baseball for Japanese players, but it has only served to prevent or delay talented players, like Luis Scola, from joining the NBA.  The CBA doesn't expire until after 2011 (and the NBA can opt to extend for another year) leaving the league impotent to compete with international teams on equal terms for the next few years.  And instead of trying to bring the NBA Players Association and ownership to the bargaining table to add mutually beneficial addenda to the CBA, Commissioner David Stern is helping to plan the expansion of competition.

David Stern: Globetrotter

In between TV anchors talking about: how much more physical international ball is than the NBA (sad, but true); the inconsistency of Olympic reffing (just sad); the refreshing "class" of the American team (they had worried about players burning down their hotel and trying to smuggle doobies through customs); and noting how FIBA and the Euroleauge use the WNBA three-point line (they didn't mention it, actually, but they really should have, again and again and again); David Stern told reporters that he and Chinese authorities had been discussing the formation of a professional league in China, and that he is looking to establish a "presence" in India, which just hosted their first NBA Without Borders this summer:

 "'[The Chinese league] would be a separate league that would be NBA-affiliated or NBA-sponsored, but it would be independent,' Stern said. 'And it would just sign players. For a very long time to come it would be at a lower scale than the NBA. But as the sport develops in China, and as more players around the world recognize the opportunities of playing in China, we see that league growing and strengthening.'"

Stern has had an eye on international expansion for a long time and offered the greatest proof of his impending dotage this spring, when he said that he envisioned an NBA expansion team in Europe within the next decade.  He failed to mention the logistical details, how he plans to account for the inconvenience of the Atlantic Ocean, and such.  The London Hooligans' would have to fly over seven hours just to hook up with the Brooklyn LeBrons, and another six or seven hours to play West Coast teams, putting the Hooligans at an irreconcilable disadvantage.  The poor guys would have to travel 3,500 miles just to meet groupies with straight teeth.

An independent NBA-associated league operating successfully in China, however, is quite plausible; Stern envisions NBA partnerships in 8 to 12 stadiums across the country.   It's not clear whether this league would directly compete with the Chinese Basketball Association or whether that league would be subsumed in partnership, like the ABA.  Regardless, if there's anything we learned about China, in the Beijing games, it's that their 16-year-old girls look curiously like 12-year-old girls. Also, apparently everyone there loves basketball, and I don’t imagine there would be any difficulty filling another 12 stadiums with fans.  I understand the NBA wanting to put down business roots in the biggest burgeoning market in the world, but there's a difference between selling Kobe Bryant jerseys and creating a new league. I question whether it's in the interests of NBA fans (and NBA owners) to build leagues around the world that will eventually compete with the NBA. 

The problem with Stern's statement is his assurance that, "for a very long time to come [the Chinese league] would be at a lower scale than the NBA."  Sure, I buy that, but the Euroleague competes at a "lower scale" than the NBA, and it's thriving and competing for NBA-level talent. I think it would be a huge folly to underestimate the rate at which professional basketball in China will grow, especially given projections for the growth of consumer spending power in China in the coming years. 

According to McKinsey & Company, the urban-affluent Chinese (1% of the population) have annual disposable income roughly equivalent to $62.5 billion and, "They consume globally branded luxury goods voraciously, allowing many companies to succeed in China without significantly modifying their product offerings or the business systems behind them."  Furthermore, in the next decade or so, McKinsey expects the buying power of the growing Chinese middle class to "redefine the Chinese market" and "dwarf" that of the urban-affluent.  Does Stern really not think that an NBA-affiliated Chinese league would quickly become successful enough to invest in some NBA-quality bench players?

Bill Simmons, one of my favorite basketball writers, has long touted Stern's surpassing brilliance, attributing almost every windfall that comes the NBA's way to his ingenious orchestration.  I suppose it's not impossible that, realizing that the critical flaws of the CBA are unlikely to be fixed any time soon—owners and players not being famous for placid negotiations—Stern is promoting foreign competition to force the NBA to adapt, and avoid suffering serious losses.  I’d like to think that’s the case, but it isn’t.  Stern's definitely a very smart guy, but he's not Kaiser Soze and I don't think he's playing chicken, here; he's just running the NBA like any corporation seeking global expansion.  The problem is that sports leagues are consortiums of local businesses, whose products aren’t fully transmittable, regardless of broadcasting technologies—anyone who's been a fan from afar can appreciate that.  I'm also convinced that Stern, approaching retirement, wants to leave a legacy of worldwide expansion of a sport that, predominated by black athletes, was once widely thought unmarketable to a predominantly white audience.  It's a worthy goal, but Stern isn't the basketball ambassador to the world; he's an employee of the NBA and has a duty to support the league (not just represent it) to the best of his ability.

That Damn Dream Team

The NBA’s best defense for their inutile system is that when the NBA's CBA was written, during the lockout, the league had no competition to consider.  They may not have an antitrust exemption, like MLB, but the NBA benefitted from international indifference.  Then the ’92 Olympic ‘Dream Team’ changed everything.  I wasn’t aware of the magnitude of the Dream Team’s impact on the rest of the world until the past few years, during which I’ve heard numerous foreign NBA players cite the ’92 squad as their inspiration to start playing basketball.  During the Beijing Games, the TV folks discussed it ad nauseam, especially since the Dream Team was so frequently compared to this summer’s ‘Redeem Team’.  The international basketball community’s reaction to the Dream Team, however, makes that comparison futile.  The '92 team jogged their way to a 44 point-differential against inferior competition that provided almost no resistance.  The clip below looks like a Division I team running a three-passes-before-every-shot drill against middle school kids. 
[Note: I also picked this clip because it's so delightfully out of joint.  The Dream Teamers laugh and slap hands, while DMX talks about bodies piling up, and the beginning, "Last night, I had a dream..." is a snippet from the Jay-Z track where he and the ghost of Biggie Smalls talk about his murder.  Mixes like these make me happy.]

In contrast to the '92 team, this summer's squad encountered formidable opposition and played with full-bloom playoff intensity.  In particular, the US played defense with such ardor—contesting every pass, every shot, rotating and switching, trapping, applying full-court pressure for long stretches—that the commentators noted how much harder several of the players were defending, than they did in the NBA.  It was a glorious effort, and it was necessary to win gold.  On the few occasions when the US team let down their guard, the opposition poured it on, raining three-pointers, perfectly timed backdoors and interior passes, and effortless dribble-penetration (especially that little Australian.)  In '92 Charles Barkley noted that one Angolan player looked like he hadn't eaten in three weeks.  This time the US faced dozens of well-fed professionals from the Euroleague, a consortium that just signed twelve new talents, fresh from the NBA.

 Where We're Headed

Foreign basketball leagues won't draw NBA stars in the foreseeable future.  Aging stars might head overseas, like David Beckham did, but I think there's just too much money available for NBA stars, in America, to be enticed by the international leagues.  Instead, I see the beginning of a hollowing out of the NBA, when valuable bench players go overseas to get paid like stars and the third-stringers leave to get paid a million or two, instead of a half-million.  The NBA will continue to attract young international prospects with big upside, like Knicks '08 pick Danilo Gallinari, because the rookie pay-scale provides competitive compensation, at the lottery-pick level.  But Juan Carlos Navarro was the 2006 MVP of the ACB Spanish League, and at 28, has no incentive to waste his prime years in the US as a restricted free agent looking to make his bones, when FC Barcelona will pay him the equivalent of about $24 million over the next four years.

I'm not sounding the bell for the end of NBA superiority; the basketball market disparity between the US and the rest of the world is still enormous.  Next year, twenty-seven of the thirty NBA teams are likely to be over the '08-'09 luxury tax threshold of $58.68 million, while only top Euroleague teams like Panathinaikos, Olympiacos and CSKA have $30 million rosters, and some teams sport rosters earning a tenth of that.  The NBA minimum is 75% of the salary cap—$44 million this year. 

The NBA still employs the vast majority of the world’s top basketball talent, but the ascent of international basketball has fissures forming in the NBA’s dominant position in the market.  This summer was the beginning of the end of that dominance.  David Stern's delusions of international expansion for the NBA are instructive here.  Europe isn't ready for an NBA team yet, he said. "We need the buildings. We need the increase in affinity in terms of television. And we need an economic model that works."  But he sees it happening within ten years.  When a European city is ready to financially support an NBA roster, they will, but that team won’t be part of the NBA.  The NBA still has the highest level of play, across the boards, by far, and the special allure of its supremacy will persist and provide a recruiting advantage—professional athletes are incredibly competitive and it's their nature to test themselves against the best. But will international veterans take 70%–90% salary reductions to give it a try?  Will NBA mid-to-low-level talents turn down international league contracts five times what they can get in the US?  More and more, the answer is no.

This paradigm shift isn't happening overnight, for sure, but I still think most columnists underestimate the speed with which this hollowing out of NBA rosters can occur. I'm not concerned about Panathinaikos, Olympiacos and CSKA stacking their squads with all the NBA's 6^th men; they're winning with $30 million rosters—no reason to pay $60 million. Rather, I'm concerned that five to seven years from now, the top teams will sign one or two mid-level NBA players (a Josh Childress here, a Ben Gordon there) and thirty teams, from budding leagues all over the world, will invest in just one low-level rotation NBA player.  Almost all of the top tier talent will be in the NBA for the foreseeable future, but when Jameer Nelson takes a breather, someone has to throw the alley-oops to Dwight Howard, and it might not be a player of Arroyo's caliber.  And it's quite plausible that Kobe Brant will go full seasons without passing the ball.

I'm not a protectionist; I celebrate the rise of international basketball and (as a Rockets fan, especially) I'm grateful for its benefits.  I've been watching the NBA since I could reach the "on" button on the TV, and I'd never seen anything quite like this until Manu came into the league.

Saying one is against basketball globalism, on the other hand (or globalism, in general) is quite meaningless; it's a fact, not a position. The NBA was the only game in town and now it isn't.  In the long run, everyone benefits.  More basketball talent means a higher level of play, and the game will be better for it, here and abroad.  In the short term, however, basketball's worldwide popularity will outpace the talent available and the NBA will have to change to maintain the quality of its personnel.  The league is in no danger of being upended by the Euroleague, but if the next CBA isn't dramatically altered to allow NBA teams to compete for players on the global market, a significant number of mid-tier and low-tier NBA players will depart for greener pastures, and the level of play in the NBA will decline.  Even if the NBA adapts, it will still lose players; that's inevitable, but teams would also be free to pursue international talent without restriction.  And a more progressive (cap-less) economic system would help teams stymie the depletion of their rosters, while the world develops more talent to compensate for losses—watch the next Jason Kidd come out of Bogotá or Cambodia.  As long as the NBA is taking the right steps to compete in earnest for the services of the best four hundred players in the world, I'll be happy to cheer on the new Chinese league.  And in a few years, I'll be the first in line buy a Bahrain Expatriates jersey.

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